The Federal Pell Grant, an undergraduate need-based award, is the foundation of the federal student aid program. Here's an overview of this important funding resource.
More than four million students each year rely on a Federal Pell Grant to cover some of their college expenses. The Pell Grant is the jewel in Federal Student Aid's crown--free money, distributed according to financial need. This grant is one of the most versatile in the federal aid programs--you can use it at any eligible school and for the length of your undergraduate degree program.
Where Do You Sign Up?
To apply for and receive a grant, you must be a U.S. citizen or eligible non-citizen with a high school diploma or GED. In addition, you must be an undergraduate student who has not yet earned a bachelor's degree or first professional degree.
If you meet these criteria, simply fill out the FAFSA (Free Application for Federal Student Aid). The Department of Education's processing center determines your eligibility based on the information you provide on the FAFSA and sends you a Student Aid Report (SAR). The SAR contains your Expected Family Contribution (EFC), which represents the amount you and your family are expected to contribute toward your educational expenses.
Award Amount
Your school uses the information on the SAR to determine your Pell Grant award. This year the Department of Education raised the maximum Pell Grant award amount for the first time in five years. The 2007-08 school year features an annual maximum $4310, up from $4050 and awards can range from $400 to $4310.
The award amount you receive depends on your financial need--both your ability to pay and the expected cost of your program. The following factors determine your Pell Grant award:
• Expected Family Contribution (EFC). EFC is the amount you and your family are expected
to contribute toward your educational expenses.
• Cost of Attendance (COA). COA reflects the estimated cost of attending your school,
including tuition and fees, books, room and board, and other educationally related
expenses. Your COA will be higher at a private institution than a state college, for
example.
• Enrollment Status. Your award is generally based on full-time enrollment. You are
eligible to receive a Pell Grant if you are enrolled part time, but the amount will be
proportionally smaller. If you begin as a full-time student and change your enrollment
status during the year, you may be required to repay a portion of the grant.
Renewability
The Pell Grant is not automatically renewable--you are required to submit a renewal application each year. If your financial situation and Pell Grant funding remains stable, chances are good that you'll receive a similar grant amount each year of your program. There is no regulation limiting the number of years you can receive a Pell Grant--you're eligible as long as you are making satisfactory progress toward your degree.
Disbursement
Your school's financial aid office handles all the logistics of disbursing financial aid. Policies differ--your school should provide you a written notification of the award amount and how and when you can expect payment. Some schools credit the funds directly to your school account, applying it to tuition and fees and housing costs. Others pay students directly by check, or some combination of these payment methods. Your school is required to pay Pell Grants at least once per term, or twice per year.
Pell Grants are the foundation of the federal government's financial aid programs. Don't miss out on this opportunity to offset your college expenses.
Author: Sonja Albrecht
Source(s)
The College Board
http://www.collegeboard.com/student/pay/scholarships-and-aid/36318.html
Federal Student Aid
https://studentaid.ed.gov/PORTALSWebApp/students/english/PellGrants.jsp?tab=funding
Peterson's
http://www.petersons.com/finaid/file.asp?id=903&path=ug.pfs.federal